Can I Cancel Health Insurance Due to a Divorce?

Canceling your health insurance coverage early can cause significant problems in settling your divorce. It can also leave you and your spouse financially vulnerable. To avoid problems, maintain your family's current coverage until your divorce is finalized or you get permission from the court to cancel your policy or stop paying premiums.

The Effect of Divorce on Group Health Coverage

• Many households rely on health insurance coverage provided through a group policy offered through a workplace at which one spouse is an employee. Once a couple divorces -- or under some policies, legally separates -- the spouse who is not an employee loses health insurance coverage. Federal law requires some employers, typically those with 20 or more employees, to offer the ex-spouses of employees the opportunity to continue their insurance temporarily through the COBRA, or Consolidated Omnibus Budget Reconciliation Act, program. Health insurance premiums offered under COBRA are often very expensive, as they are no longer subsidized by an employer.

The Spouse Who Holds the Group Policy

• If your work health insurance policy covers both you and your spouse, contact your human resources or benefits department. Explain your situation and ask for information on the costs of COBRA coverage for your spouse. Provide your lawyer with the costs so that he can better help you determine a fair financial settlement. Do not discontinue paying the premium for your spouse's coverage until your divorce is final or your lawyer or divorce judge tells you that you can do so.

  Once the divorce or legal separation is final, notify the appropriate department at work. Give them your ex-spouse's mailing address so they can follow up with information about the discontinuation of the policy and COBRA options.

The Spouse Without a Policy

• If your health insurance coverage is through your spouse's employer, you'll have to find your own insurance after your divorce. If you can get health insurance through your own employer, do so. Your divorce is a "qualifying event" that allows you to enroll in the program outside the normal enrollment periods. If you are enrolled in school, ask if your school offers a group policy to its students.

  If you aren't eligible for a group plan, begin to search for other coverage. You may be able to get an individual plan through a local insurance company or agent. Your spouse's employer may send you information about continuing your current health insurance coverage through COBRA. While COBRA is often very expensive, it may be your best option until you can secure coverage of your own. If the premiums are more than you can afford, talk to your lawyer about requiring your spouse to pay all or part of your premiums as a condition of your divorce.

Children and Health Insurance

• Divorce court judges hold parents responsible for providing health insurance for their children. If you have kids, either you or your spouse will have to secure and pay for their insurance. Your custody agreement should include a statement regarding which parent is responsible for maintaining your children's insurance policies.